Hi Traders! CHFJPY technical analysis and forecast post is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! here). Now, let’s start our analysis from the highest timeframe which will be the daily chart here.
CHFJPY D1(Daily) Chart Analysis – Key Resistance Zone, Bearish Divergence, ADX Indicator
On the daily chart, the price which is moving higher has reached a key resistance zone formed by the 261.8%(122.316) Fibonacci expansion level of the first wave and the 100%(121.358) Fibonacci expansion level of the second wave. The price respected this key resistance zone and is currently bouncing lower from this zone. Also, we have a bearish divergence that has formed between the first high that has formed on 27th May 2021 and the second high that has formed on 15th June 2021 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as evidence of bearish pressure. We may now move down to one timeframe lower and see if we can find evidences supporting this bearish view.
CHFJPY H1(1 Hour) Chart Analysis – Heikin Ashi Candles, Bearish Trend Pattern, ADX Indicator, Strong Resistance Zone
On the H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment.
In addition to this, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Also, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bearish pressure. Until the strong resistance zone (marked in blue) shown in the image below holds my view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
CHFJPY D1(Daily) Chart Analysis
- Key Resistance Zone, Bearish Divergence, ADX Indicator
CHFJPY H1(1 Hour) Chart Analysis
- Heikin Ashi Candles, Bearish Trend Pattern, ADX Indicator, Strong Resistance Zone
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
